VAT Fraud and Online Shopping
VAT fraud has been in the news a lot recently, with the government vowing to crackdown on fraudsters avoiding VAT when using online buying / selling websites such as eBay and Amazon. On these sites, thousands of products, ranging from cheap household items to more expensive pieces like musical instruments, are sold every year by VAT fraudsters.
Both Amazon and eBay claim that it is not their responsibility to make sure their sellers are complying with tax laws.
Why do fraudsters sell their items without VAT? Well, it’s not unusual for their items to sell for cheaper than their competitors. However, it’s also common for fraudsters to send the proceeds of their deceit overseas, and so their products sell for prices that are similar to others selling the same items.
Private Sellers and VAT
I sell my own second-hand goods online, do I have to pay VAT?
The law states that, if you sell your own private second-hand good online, you don’t actually have to pay VAT. This is because as far as the government is concerned, you paid the VAT when you bought the item originally, so it does not need to be taken off the second time around.
What if I’m buying something from outside Europe?
If the value of the goods comes to over £18, you are liable to pay VAT. The amount you pay, and any additional information, will be shown on the customs note that’s attached to the item when you receive it. The VAT itself will be paid by the shipping company. They will collect the VAT from you, and could charge you for doing so.
Your shipping company will send you a letter asking for the VAT payment either before or after the goods are delivered, and it’s essential that you pay the bill. Failure to do so may result in further action being taken against you. If you don’t receive a letter when you think you should have, don’t worry – it’s the shipping company’s responsibility to ask you for VAT, not yours.
Remember: it is illegal to communicate with an overseas seller to provide a false customs note.
If you’ve been convicted of VAT fraud, we can help. Contact us to speak to one of our dedicated fraud solicitors.